3 Tips to Safely Invest in Cryptocurrency | CoinCRED
With the advent of technological advancements, it’s safe to say that technology has equally impacted each vertical of our lives, from the way people work, communicate, shop to how they pay and shop. As we stand in the epicenter of digitalization, we’ve reached a point where consumers are no longer giving preference to cash making way for contactless payments and digital currencies. One such latest mode of digital currency is a cryptocurrency (or “crypto”) that can be used to buy goods and services which makes use of an online ledger with strong cryptography to secure online transactions.
I’m sure most of us are familiar with or at least heard about Bitcoin by now, the first cryptocurrency to go mainstream. Cryptocurrency has evolved into an increasingly prominent investment possession for top investors. Irrespective of its uncertainty and volatility, people are always eager to dive into the crypto bandwagon, the primary reason being good returns.
The most popular cryptocurrency is Bitcoin, pursued by Ethereum, Dogecoin, and others. Bitcoin has been under unstable price strides this year, reaching about $65,000 in April right before forfeiting almost half of its value in the next month.
As a newbie in the cryptocurrency market, you must be wondering what cryptocurrency really is? Is it too late to start investing now? What are the best tips to invest in cryptocurrency? We understand that taking your first steps in the Blockchain world can be really confusing and exhausting. Don’t worry, you’re at the right place. We are going to answer all your questions and concerns regarding Cryptocurrency. Read on to uncover-
What Is Cryptocurrency?
A Cryptocurrency is a digital currency that is usually created using blockchain technology and is secured by cryptography. Most cryptocurrencies are decentralized networks built on blockchain technology. Blockchain interprets how transactions are documented into “blocks” and time punched. It’s a peer-to-peer network that can facilitate an individual to send and receive payments from anywhere across the globe.
Cryptocurrency payments prevail entirely as digital entries recorded within an online database. With the help of cryptocurrency, it is now possible to transfer money online globally in the absence of a payment partner like a bank or digital payment processing apps like Paytm or Google Pay, instantly, 24/7, for low additional charges.
When an individual makes a cryptocurrency fund transfer, the transactions are kept in a public ledger. Your cryptocurrency is stored in a digital wallet. Also, when you pay using cryptocurrency, you are not required to provide any sort of needless personal information to the retailer, which means you get complete freedom over your financial information as it is safeguarded from being disseminated with third parties like banks, payment service providers, advertisers, and credit-rating companies. And since none of your sensitive information is transmitted over the internet, there is almost no risk regarding your monetary data being arbitrated, or your identity being stolen.
Did you know that cryptocurrency has been named on the basis of the fact that it makes use of encryption to verify transactions? This indicates that a highly advanced level of coding is involved in classifying and disseminating cryptocurrency data between wallets and public ledgers, which creates a barrier for manipulation of transactions.
How Safe Is Cryptocurrency?
Let us get this straight, it’s really difficult to meddle with the network powering crypto. The reason being permission less systems that are open source. On top of this, this network has never been hacked as it’s a relatively complex, technical process.
A distinguishing characteristic of cryptocurrencies is that they are mainly not allocated to any central authority, making them practically resistant to government regulations or manipulation.
In addition, each transaction goes through a two-factor authentication process. Let’s say if you’re making a payment you might be requested to enter your username and password before processing it or an authentication code that’s sent as a text to your personal smartphone.
3 Tips to Invest in Cryptocurrency Safely
No doubt, investments always involve some risk, but experts assert that cryptocurrency is one of the most uncertain investments. But even after its unpredictable state, the cryptocurrency ecosystem and blockchain technology have grown into a billion-dollar industry over the last few years, while the cryptocurrencies market has crossed the $1 trillion mark.
So in case you’re intending to invest in cryptocurrencies, these tips can help you make the right and informed choices.
Before investing even a single dollar, acquire some information about cryptocurrency exchanges. These platforms give the means to purchase and trade digital currencies. It can be a tough choice though since there are more than 500 exchanges to choose from, says Bitcoin.com. We will suggest you to take your time and do your research, go through reviews, expert advice, and consult with more skilled investors before moving forward.
Know-How to Store Your Digital Currency
Buying cryptocurrency also involves storing it. You can store it on an exchange platform or in a digital wallet. As there are several types of wallets, each one has its own pros and cons, technical requirements and security frameworks. But when it comes to exchanges, you must examine your storage choices before making an investment.
Diversify Your Investments
It’s a known fact that diversifying your investments can be a really beneficial investment strategy, and it also holds true when you’re investing in cryptocurrency. Let us explain this through an example, if you’re looking forward to investing, don’t just put all of your money in one form of currency like Bitcoin. Since there are thousands of options, we suggest it’s best to wisely flatten your investment around multiple currencies.
The financial world and investors are all hyped about cryptocurrency but do remember that it’s still in its babyhood. Investing in a currency that’s new yet popular comes with certain risks and challenges, so be prepared. If you want to know more about cryptocurrency and investment mantras, get in touch with our team! Follow our blogs for more information.